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How Should Business Schools Prepare Students for Startups? – Jeff Bussgang and Michael Seibel
24 segments available
Jeff Bussgang is a lecturer at Harvard Business School and General Partner at Flybridge Capital Partners. Michael Seibel is CEO of YC.
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Introduction to Startup Education
In this episode, Craig Cannon introduces a discussion on the role of business schools in preparing students for startups, featuring insights from Jeff Bussgang of Harvard Business School and Michael Seibel, CEO of Y Combinator. They explore the disconnect between business education and the startup ecosystem.
"hey this is Craig Cannon and you're listening to Y Combinator's podcast today's episode is a conversation about business schools and startups with Jeff bus gang a lecturer at HBS and GP at flybridge C..."
The Disconnect in Startup Preparation
Michael Seibel shares his observations on the inadequacies of business schools in preparing students for tech startups, highlighting a tweet that sparked a conversation about the lack of essential skills among MBA applicants. Jeff Bussgang responds, emphasizing the importance of aligning business education with startup realities.
"okay so on April 10th of this year Michael tweeted reading YC applications and observing that business schools are doing a criminally poor job of prepping students to start tech companies yes and Jeff..."
Core Tenets of Startup Success
Jeff Bussgang discusses the fundamental principles that Y Combinator looks for in startup applicants, stressing that many MBA students are unaware of these crucial tenets. He expresses frustration over the high cost of business education when students lack basic startup knowledge.
"I think the thing that kind of triggered the frustration is that most people don't realize that as YC partners we have to read approximately 500 of the 6 to 7,000 applications that come in every batch..."
Challenges in Entrepreneurship Education
The conversation shifts to the challenges faced by business schools in fostering entrepreneurship. Jeff and Michael discuss the difficulty of replicating Y Combinator's successful model and the barriers to recruiting experienced entrepreneurs to teach in academic settings.
"great because to be honest a number of business schools reached out and kind of it started a dialogue and I started realizing a little bit more kind of what I'm facing here in my way what are the thin..."
Bridging the Gap Between Theory and Practice
Jeff Bussgang emphasizes the need for business schools to encourage practical experience in entrepreneurship. He argues that students must step out of the classroom and engage with the startup ecosystem to become effective founders.
"the case for the a lot of people running these programs tonight can I throw in something here please yeah so first I love Michael's tweet and I love our back-and-forth because I think it does put the ..."
The Misconception of MBA Entrepreneurs
Michael Seibel addresses the stereotype that MBA graduates are less likely to succeed in startups. He cites data showing that many successful companies have been founded by MBAs, challenging the notion that business education is a disadvantage in entrepreneurship.
"you and what do you think historically people have been doing wrong that has led to this like preconceived notion that MBA students are not are not ones to create startups well first I don't know if t..."
Identifying Key Issues for MBA Startups
The discussion highlights three main issues that hinder MBA students from succeeding in startups: the lack of technical co-founders, commitment to the startup, and the importance of traction. Michael and Jeff explore how these factors impact the success of MBA-led ventures.
"going to be more likely to jump right in and build something so I think it's it's not that these lessons are not applicable to all entrepreneurs they're applicable to entrepreneurs that MBAs are more ..."
Improving MBA Programs for Startup Success
Jeff Bussgang outlines the root causes of the challenges MBA students face in entrepreneurship, including the siloed nature of MBA programs and the lack of technical skills among students. He advocates for greater integration of technical talent and practical experience in business education.
"applicants we see because the vast majority of applicants have no formal training mentoring or experience in the classroom dealing with any issues around startups and so I think that gap is what I'm t..."
The Role of Practitioners in Education
The conversation shifts to the importance of having current practitioners in business schools. Bussgang stresses that professors who lack recent startup experience may not provide relevant insights, and he advocates for more entrepreneurs in residence and guest lecturers to bridge the gap between theory and practice.
"so at Harvard we've tried to create a lot of fluidity with current entrepreneurs coming in and out as entrepreneurs and residents and guest lecturers and advisers but it's really hard to do that well ..."
Changing the Composition of Business Schools
Bussgang explores the idea of changing the student composition in business schools to include more technically skilled individuals. He suggests that having a diverse cohort with engineering backgrounds could foster collaboration and innovation, allowing students to find technical co-founders within their classes.
"other but they can find technical co-founders right within their class is that in the cards do you think I think it's a great question I'll give you one data point in my class of 100 students this yea..."
Integrating Technical Skills into Curriculum
The discussion continues on how business schools can integrate technical skills into their curriculum. Bussgang highlights the need for classes that encourage collaboration between business and engineering students, emphasizing that cross-pollination is vital for fostering great startups and innovative ideas.
"of technical companies so assuming that we can't change the composition of the school I guess the second thought that I had around this was is there any way that a set of courses offered at business s..."
Success Beyond Elite Business Schools
Bussgang reflects on the challenges faced by MBA students outside elite institutions like HBS. He shares insights on how students in less tech-focused environments can build networks and find success by leveraging local engineering programs and online resources to connect with technical talent.
"social engagement as that opens up to 2019 and 2020 in fact I'm already seeing classes that exact as being considered by the Business School that kid exactly what you're saying I think taking classes ..."
The Hustle vs. Foundational Skills
Bussgang discusses the balance between hustle and foundational skills in entrepreneurship. He warns against over-relying on hustle to compensate for a lack of technical expertise, stressing that some challenges cannot be overcome without the right foundational skills, which are crucial for long-term success.
"getting their MBA who just got their MBA can replicate yeah look I think it's hard it's on a platter for you at Stanford at MIT and harder that's not on a platter for you in other environments where y..."
University Goals vs. Startup Realities
Bussgang discusses the mismatch between the goals of universities and the realities of creating billion-dollar startups. He points out that while universities focus on providing a pedagogical experience, they may inadvertently coddle students, which can lead to challenges in the competitive startup environment.
"success significantly and I don't know how to communicate that to people it's really strange because I mean like we talk about this stuff all the time at Y Combinator but people still apply without th..."
The Need for Rigorous Entrepreneurship Education
Seibel argues for the necessity of rigorous entrepreneurship education, comparing it to other academic disciplines that require prerequisites. He emphasizes that entrepreneurship should not be treated as a basic subject and calls for higher-level classes that attract the best talent, as the best entrepreneurs want to collaborate with other high achievers.
"habit pedagogical experience for their students and so it may be that there's a little bit of a mismatch of goals here you know subject look at incentives goals because the fees of course are going to..."
The Reality of Startup Success Rates
Bussgang reflects on the harsh realities of startup success rates, likening them to the odds of becoming a professional athlete. He questions why entrepreneurship is often viewed as accessible to everyone, despite the significant barriers to success, and advocates for a more realistic understanding of the challenges involved.
"focused goal I think so that's my challenge though because there are some areas of a university that it's clear they're trying to expose all of the students in a very open and honest way but there are..."
Evaluating the Value of an MBA
Seibel and Bussgang debate the value of an MBA versus real-world startup experience. They discuss how an MBA can provide a valuable network and skills, but question whether it is more beneficial than hands-on experience in a startup environment, highlighting the differing opinions within the entrepreneurial community.
"front door and I don't know how to do calculus I'm not staying in that class for very long and that's undergrad so I'm not really asking where is the place for the 101 I think that that should exist w..."
Long-Term vs. Short-Term Decisions
Bussgang emphasizes the importance of considering long-term outcomes when deciding between an MBA and startup experience. He shares insights on how the relationships and skills gained from an MBA can pay off in the future, even if the immediate return on investment seems low.
"argue that if you're a business person you don't have access to a technical network spending two years at an early stage startup in the Bay Area might be more fruitful than spending those two years at..."
The Role of Mentorship in Career Growth
Seibel discusses the critical role of mentorship in navigating career paths, particularly for those in early-stage startups. He suggests that being in a supportive environment with mentors can significantly enhance one's career trajectory, making the case for the value of structured experiences like an MBA.
"come from startup land and go back into startup land at the same level that they left after two years of spending a hundred seven thousand dollars on their MBA program yes brutal I've got a woman I've..."
Choosing Between Education and Startup Experience
Bussgang advises young professionals on making the decision between pursuing an MBA or gaining experience at a startup. He stresses the importance of evaluating personal conviction and the potential for growth in a startup environment, while also recognizing the benefits of an MBA in building a strong foundation for future success.
"scaled an executive and as a leader at Google and then later at Facebook or was she enabled or enhanced because of her two years at you know the MBA program C I think I find that tricky because I thin..."
The Importance of Technical Skills
The discussion shifts to the significance of technical skills for aspiring entrepreneurs. Bussgang argues that if you're not attending a top business school and lack technical expertise, pursuing a role in a startup is more advantageous than obtaining an MBA. They stress that the startup ecosystem values practical experience over formal education in many cases.
"page from Stephen Covey's book sharpening the saw a little bit story but the guy in the woods whose song like crazy but so sloppy can read out hey why don't you just stop and sharpen the saw it's once..."
Navigating Career Transitions in Business School
Bussgang shares insights on the unexpected career trajectories of business school graduates. Many students enter business school with the intention of advancing within their current fields but often find themselves redirected into middle management roles. This segment highlights the importance of aligning business education with entrepreneurial aspirations.
"try to get a job in an early stage company in a startup city and I think the one thing that people might not realize is that people do not see the NBA as a start-up what is that called it's not seen a..."
Advice for Students Seeking Startup Guidance
Bussgang and Seibel provide advice for students who feel they are not receiving adequate guidance on startups. They recommend seeking out influential blogs and books from successful entrepreneurs, emphasizing the importance of learning from established resources in the startup community to gain valuable insights and knowledge.
"that I want to dig into is that what do you do if you're a student and you know you're not getting good advice I mean like you look at the person giving you advice and you're like they are legitimatel..."
Investing in Transformative Ideas
The conversation concludes with a discussion on the challenges venture capitalists face when investing in MBA graduates. Bussgang explains that VCs look for transformative ideas and market opportunities, which often stem from technical founders. They highlight the need for vision and innovation in successful startup ventures.
"disruptive industries and upper end markets and so if an MBA has a cute app or a neat little business spin on something that's well-trod that's not investable for a venture capitalism it needs to be s..."